First Cobalt Corp. (FCC.V) aims to be the first vertically integrated cobalt company in North America. FCC.V controls over 10,000 hectares of prospective land, including a mineral processing facilities.
Looking back at the Cobalt price for the last 5 years, there was a sharp rise in 2017. Cobalt price went from about $12.50 USD/lb and peaked above $40 USD/lb. Recently there has been a sharp decline from these levels to $26.31 USD/lb on October 11.
Indeed, the decline in Cobalt prices in the last six months appears to be the cause for the decline of FCC.V's valuation. Much of the correction seems to be related to the excess in supply generated by the price increase. For more details on this, click here.
We initiated coverage on May 2018. Since then, the following releases have been issued.
June 4 - Complete US Cobalt acquisition.
June 5 - Letter to shareholders. Iron Creek. 1. Resource estimate is underway. 2. Refinery: recently initiated a study for a restart and expand the facility. 3, Cobalt Camp: Assess near-surface mineralization that could be amenable to open pit mining.
June 11 - Announces $9 Million Program for Iron Creek Project. The Company intends to publish a mineral resource estimate by October 2018 and complete an additional 30,000 meters of drilling designed to double the mineralized zone along strike beyond the area drilled in 2017.
June 19 - Extends mineralization at Iron Creek and Initiates Metallurgical Study. Metallurgical study commenced to assess concentration methods and resulting recoveries for cobalt and copper. Result reported specifically targeted the lesser known Waite Zone.
June 27 - AGM Results - 2.2M stock options granted at C$0.49 and re-granted 0.61M shares at C$1.43 for a period of sixty months.
July 5 - Corporate Update.
July 10 - Identifies Second Cobalt Mineralization Trend in Kerr Area of Cobalt Camp. Vision of large scale open pit mining in the Cobalt Camp, re-allocating a larger portion of the 2018 exploration budget to the Kerr. Nine Drill holes pending, and additional drill planned.
July 12 - Adds Two Drill Rigs to Idaho Project. A maiden resource estimate is underway and will be available by October.
Sept. 4 - First Cobalt Acquires 100% Ownership of Iron Creek Project. Eliminates outstanding royalties. Anticipate releasing preliminary metallurgical work and the maiden resource estimate for Iron Creek in the next few weeks.
Sept. 25 - Eagerly Awaits Maiden Resource Estimate as Geopolitics Muddy Outlook for Foreign Cobalt Supplies. First Cobalt anticipates completion of maiden resource estimate imminently at Idaho site.
Sept. 26 - Announces Inferred Mineral Resource for Iron Creek Project. First NI 43-101 Mineral Resource Estimate.
Inferred mineral resources of 29.6 million tons (26.9 million tonnes) grading 0.11% cobalt equivalent (0.08% cobalt and 0.30% copper) under a base case scenario pit constrained and deeper mineral resource. Resource contains 45 million pounds (20,411 tonnes) of cobalt and 175 million pounds (79,379 tonnes) of copper for 62.9 million pounds (28,528 tonnes) of cobalt equivalent.
Sept. 27 - Henrik Fisker joins First Cobalt Board of Directors. Certain directors and officers of the Company have been granted incentive stock options to purchase an aggregate of 0.34M deferred share units and 2.1M common shares at $0.36 for a period of five to seven years.
Oct. 4 - Intersects High Grade Mineralization at Iron Creek. Third drill rig expected on site in October and Company will undertake a bore-hole geophysical survey to potentially identify extensions of known mineralization as well as new targets.
Oct. 10 - Assessing Restart of Canadian Refinery. Results of three studies supporting a restart of the First Cobalt Refinery in Ontario, Canada. At 24 tpd and using the current flow-sheet, the capital cost of the restart is $25.7M (including a 30% contingency) and operating cost is estimated at $6.7M per year. Permitting review concludes that a restart is possible within 18 months. Discussions initiated with potential off-take partner.
While the Cobalt price have not been friendly to FCC.V's valuation, there was a number of developments in the last six months that were noteworthy.
The company completed the acquisition of US Cobalt (USCO.V) and increased its investment at Iron Creek by $9M. In addition to acquiring 100% of the rights there, it completed the first NI 43-101 Mineral Resource Estimate. FCC.V was also active in the Cobalt Camp in advancing the Kerr Project and recently completed three studies to restart the Refinery.
Eight Capital target of $1.40 cents (June 4th) now seems inflated but the recent (September 18th) Canaccord Genuity estimate ($0.70) appears realistic. In contrast, the most recent issuance of options at $0.36 cents (Sept 27th) are quite low in relation to the previous (June 27th) at 0.49 cents. Interestingly, these came after a lengthy decline where the FCC.V insiders completed more than eight purchases; six of which occurred between June to August 18th.
Despite those developments, FCC.V loss more than 50% in valuation and it languishing close to it's 52 week low of $0.26 cents.
It goes without saying that FCC.V has cooled down while its activity seems to be heating up.
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